Study: U.S. industrial property
sector continues recovery
go figure …
5%
The percentage by which total inventory-to-sales
ratios are running below their five-year average. The
figure indicates that overall inventory levels remain
lean despite restocking efforts over the past 12 to 18
months, and that supply chains may be vulnerable to
product stockouts if consumer confidence picks up.
The long-moribund U.S. industrial property sector, which
showed signs of life in the second quarter of 2010, saw a
pickup in activity in the third quarter, driven by increased
leasing from large corporations, according to a report on
North American industrial trends released last month by
Jones Lang LaSalle (JLL).
Large corporations are taking advantage of still-low
prices to consolidate to better locations or trade up to bet-
ter-quality space, according to JLL’s third-quarter North
America Industrial Outlook report.
“Markets with strong logistics infrastructure that serve as
distribution hubs to large populations are seeing the greatest growth levels,” said
Craig Meyer, managing director and head of Jones Lang LaSalle’s logistics and
industrial services group.
Meyer said overall industrial vacancy rates remained relatively unchanged from
the second quarter, holding steady at 10. 4 percent. However, net absorption—the
amount of space being leased relative to the space being returned to the market—
has progressed into positive territory at 9. 3 million square feet for the quarter. That
is the second consecutive quarter of occupancy gains.
The Philadelphia/Harrisburg region led all regions in the quarter with 2. 5 million
square feet of positive net absorption. It was followed by California’s Inland Empire
at 1. 9 million square feet.
Year to date, the Philadelphia/Harrisburg region showed a net absorption gain of 6. 4
million square feet. Other regions that have showed recoveries include Chicago with 4
million square feet of positive net absorption for the year to date, Houston with an
absorption increase of 3. 6 million, and Dallas/Fort Worth with 2. 6 million square feet.
Meyer said companies with large space requirements drove deal velocity in the
third quarter. In addition, many transactions were new leases, “perhaps signaling
the end of the dominance of renewals and consolidations,” he noted.
“Landlords remain aggressive to keep occupancy levels stable and the market as
competitive as possible,” Meyer said. “With construction still limited and big box
space scarce, we are seeing some rent stabilization in some of the aforementioned
major industrial hubs.”
Still, the average third-quarter industrial asking rents across the nation fell 1. 2 per-
cent, marking the 10th consecutive quarterly drop since early 2008, JLL said. This
trend will continue into 2011, at least in smaller regional markets, the report said.
All told, more than half of all markets reported a reduction in the amount of sub-
lease space in the quarter, an indication that supply could be tightening and that
higher rates could follow, the report said. ;
SOURCE: GOVERNMENT REPORTS; ROBERT W. BAIRD & CO.
George Prest joins
MHIA staff
FedEx to raise ground parcel, home delivery rates
FedEx Corp. announced in early December that it would raise rates on its FedEx Ground
and FedEx Home Delivery services by a net average of 4. 9 percent, effective Jan. 3.
The company will actually raise rates on both products by 5. 9 percent, but offset
those increases with a 1-percent reduction in its fuel surcharge, resulting in the net
increase of 4. 9 percent. ;
—M.S.
George W. Prest, who was
executive chairman of the
Material Handling Industry of
America (MHIA), has stepped
down from that post to join
the MHIA staff.
The group’s board of governors announced Dec. 6 that
Prest, who had been director
of business development at
Unarco Material Handling, had
been named MHIA’s chief operating officer.
Prest had also served as president of the board of directors
for the Material Handling Education Foundation. He has more
than 30 years’ experience in the
material handling industry.
Prest will report to MHIA
CEO John Nofsinger. MHIA says
his duties will include managing MHIA’s membership and
trade event activities.
MHIA members include
material handling and logistics
equipment and systems manufacturers, integrators, consultants, publishers, and third-party logistics service providers.
The association sponsors trade
events, including ProMat and
Modex, that showcase industry
products and services. ;
